Melbourne property prices leap 6.4 per cent over winter

Melbourne Domain Editor

Melbourne is leading the country for property price growth, according to new quarterly figures released on Monday.

Yet as home owners gear up for the main selling season, some Melbourne agents say the 6.4 per cent jump in home values - 1.4 per cent higher than Sydney - should be treated with a degree of caution.

Typically, the winter is a slower time for property, but researcher RP Data said Melbourne home values are on the rise.

"House values can go up regardless of the season, they're not dependent on good weather, they're dependent upon the interface between supply and demand," RP Data Victoria property market spokesman Robert Larocca said.

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"The trend is quite clear: Melbourne is in the middle of a very healthy moderate growth phase."

The director of sales at Nelson Alexander, Arch Staver, said the price growth "sounds a little on the aggressive side".

"I think that good properties are being more contested and I would concede that with A-grade properties there's been a spike, but I would be reluctant to say that's been across the board.

"The market between $1 million and $1.5 million in our areas has been one of the strongest segments."

He said that spring would be the real test and that vendors should stay realistic.

Marshall White director John Bongiorno said his agency had a good amount of quality stock throughout winter but the amount of stock on the market was down on last year. "I think a lot can be made of all the figures that come out. I feel that through our company there was a better quality of properties that were being offered and hence we probably saw a higher average sale price for [the winter] period

Hockingstuart Williamstown director Joanne Royston said her agency had enjoyed a strong winter. "We've certainly had a fairly consistent winter as far as sales go," she said. "There was a shortage of stock so [what] was available was highly contested," Ms Royston said.

Barry Plant chief executive, Mike McCarthy said his group has seen a 7.8 per cent price growth over May, June and July, with 2600 sales across Melbourne. That growth came after a fairly flat start to the year in terms of price growth.

"We are hearing there is a lack of good stock out there, there's just not enough properties coming onto the market," Mr McCarthy said.

"Anecdotally we're hearing it's freeing up now and that should help address the imbalance between supply and demand that seems to have been there over winter"

"Simply put, the more stock there is, the less pressure there will be on prices."

This was the case for the property at 35 Donna Buang Street, Camberwell when it went under the hammer. According to Domain Group data, in the depths of winter the house sold for $2,735,00 through Jellis Craig after selling just three years earlier through Marshall White for $2,300,000.

Mr Larocca said despite the growth for Melbourne, consumers are still holding back somewhat. "Interest rates are at a record low for a reason and that is because theReserve Bank has concerns about the domestic economy. Consumers have an eye on [that] and they [also] see where unemployment is."